Christian Business Men's Committee v. State

Long ago, in County of Ramsey v. Church of the Good Shepherd,45 Minn. 229, 47 N.W. 783, 11 L.R.A. 175, our law was settled to the effect that property owned by a church or a religious body was exempt from taxation if it was usedprimarily for religious purposes; otherwise not. As we there held, the "test" for determining exemption is "the primary use to which the property is put." (Italics supplied.) Applying the rule there to a fact situation similar in all respects to the one here, we held that property "would not possess the character necessary to exempt it [from taxation] merely because some part of it should be used for religious purposes, while its primary and chief use was for secular purposes." (Italics supplied.) Here, as there, the property in question is not exempt under the rule.

We have not only never deviated from the rule of the cited case, but have reiterated it in later cases. For example, in State v. Union Congregational Church, 173 Minn. 40, 44,216 N.W. 326, 328, we said:

"No hard and fast rule can properly be laid down to govern all cases. Generally speaking, it may be said that the rule governing exemption from taxation as to the real property of educational institutions is that all property reasonably necessary for and primarily used and devoted to the proper purposes of the institution and so located with reference to the main buildings or activities of the institution as to be reasonably suitable for such purposes is exempt from taxation." (Italics supplied.)

We applied the test in State v. Second Church of Christ, Scientist, 185 Minn. 242, 240 N.W. 532.

Under the rule, a particular piece of property is considered as a unit in determining whether it is exempt from taxation, and the test is applied to it as such. Accordingly, the property is either wholly tax-exempt or wholly tax-liable. In such cases, there can be no middle ground — there can be no such thing as partial tax exemption and partial tax liability at one and the same time.

Constitutional and statutory provisions of other states relating to exemption of property owned by churches and religious corporations vary to a considerable extent (see, 2 Cooley, Taxation [4 ed.] § 742; 51 Am. Jur., Taxation, § 614), and, because that is true, authorities from other jurisdictions have little value here, except where they involve constitutional and statutory provisions similar to ours. Authorities from other jurisdictions involving exemption provisions similar to ours follow the rule announced by us in County of Ramsey v. Church of the Good Shepherd, supra. People ex rel. Baldwin v. Jessamine Withers Home, 312 Ill. 136,143 N.E. 414, 34 A.L.R. 628; People ex rel. Thompson v. First Congregational Church, 232 Ill. 158, 83 N.E. 536 (citing County of Ramsey v. Church of the Good Shepherd, supra); Gray, Limitations of Taxing Power, § 1334; 51 Am. Jur., Taxation, § 614, note 11.

In State v. Pequot Rural Tel. Co. 188 Minn. 520, 522,247 N.W. 695, 696, in analogy to the rule in true tax-exemption cases, we held that the question whether real property of a telephone company paying gross earnings taxes in lieu of property taxes was exempt from property taxes depended upon whether the property was "principally devoted to telephone use." (Italics supplied.)

The decisions of the supreme court of Nebraska have varied according to the constitutional and statutory provisions considered. In Ancient and Accepted Scottish Rite v. Board of Co. Commrs. 122 Neb. 586, 241 N.W. 93, 81 A.L.R. 1166, the court reviewed its prior decisions, including that of Y. M. C. A. v. Lancaster County, 106 Neb. 105, 182 N.W. 593,34 A.L.R. 1060, and said (122 Neb. 604, 241 N.W. 99):

"In this jurisdiction it is not the character of the owner but the nature of its use which must in each individual case furnish the test for determining the tax exempt character of the property involved. If that use be truly and exclusively religious, or exclusively educational, or exclusively charitable, or a combination of the three uses, and involves no other use, for the reasons expressed in the cases cited, we are not concerned as to whether it be strictly a public charity or a private charity in the technical sense of these terms. * * *

"So, too, we are committed to the doctrine that, indetermining whether or not property falls within a taxexemption provision, the primary or dominant use, and not anincidental use, will control. * * *"

The Annotation in 81 A.L.R. 1178 states the prevailing rule in accordance with our decisions as follows:

"It is the primary use to which property is put which determines the question whether it is exempt from taxation. If it is devoted primarily to a religious purpose, an incidental use for another purpose will not destroy the exemption, but an incidental use for religious purposes, of property whose primary use is for another purpose, will not warrant exemption." (Italics supplied.)

I think we should affirm.

ON PETITION FOR REARGUMENT. On August 19, 1949, the following opinion was filed: